Today's Tax Talk with Attorney Steven Leahy

Thursday August 18, 2022 - Congress has awarded the IRS $80 Billion!  It's like winning the lottery! The recent problems with the IRS are well known:  Huge backlog of tax return processing, delays in issuing refunds, answering only 1 in 9 phone calls, accusations of political bias, cybersecurity incurrsions, privacy breeches, and on and on.

Will this monumental infussion of cash solve all of those problems.  That is the question Americans should be asking.  We already fund the IRS to a tune of nearly $14 Billion a year.  That aint hey.  It's not like they aren't funded.  Have you EVER heard a United States Government Agency say they are adequatley funded?  

There are those already saying this IRS increase is not enough...the IRS needs more!

Attorney Steven A. Leahy looks at the IRS as it stands and asks the question - Will $80 Billion Fix the IRS? on Today's Tax Talk.

https://www.bloomberg.com/opinion/articles/2022-08-17/the-irs-has-problems-that-80-billion-won-t-solve

https://www.foxnews.com/media/wapo-fact-checker-glenn-kessler-claims-gop-preying-voters-fear-irs-twitter-lights-him-up

Wednesday August 17, 2022 - Well, President Bident signed the Inflation Reduction Act into law yesterday.  The IRS just received an additional $80 Billion dollars over the next 10 years - a 75% increase in the IRS budget.  Did you know the IRS budget, after all supplemental funding is close to $14 Billion dollars already!

Treasury Secretary Janet Yellen promised “these investments will not result in households earning $400,000 per year or less or small businesses seeing an increase in the chances that they are audited relative to historical levels.”

IRS Commissioner Charles Rettig have promised “These resources are absolutely not about increasing audit scrutiny on small businesses or middle-income Americans”

Attorney Steven A. Leahy measures these promises with the facts on Today's Tax Talk.

https://mycbs4.com/news/nation-world/fact-check-team-how-the-irs-expansion-could-impact-middle-class-americans-new-spending-bill-provides-80b-to-irs-for-enforcement-audits-on-high-income-taxpayers-irs-expansion-democrats-reconciliation-bill-will-add-87000-employees-to-irs-to-improve-efficie

https://finance.yahoo.com/news/dont-worry-about-a-beefier-irs-unless-youre-a-tax-cheat-202620223.html

https://news.yahoo.com/yellen-eyes-80b-boost-monumental-151335732.html

https://www.cnbc.com/2022/08/08/reconciliation-bill-includes-nearly-80-billion-for-irs-funding.html

Tuesday August 16, 2022 - President Biden signed the Inflation Reduction Act today.  You may not know the Inflation Reduction Act allocates $4.6 billion dollars to "Enforcement."

The Act also explictly directs the IRS to perform "digital asset monitoring and compliance activities.”

"(ii) ENFORCEMENT.—For necessary expenses for tax enforcement activities of the Internal Revenue Service to determine and collect owed taxes, to provide legal and litigation support, to conduct criminal investigations (including investigative technology), to provide digital asset monitoring and compliance activities,"

Attorney Steven A. Leahy reviews the impact of the Inflation Reduction Act on Cryptocurrency and Digital Assets.

https://www.cpapracticeadvisor.com/2022/08/14/what-the-inflation-reduction-act-means-for-cryptocurrency-regulation/69430/

https://www.forbes.com/sites/taxnotes/2022/08/04/what-the-irs-funding-in-the-inflation-reduction-act-means-for-taxpayers/?sh=61ee2ddf374d

https://www.news.com.au/breaking-news/has-blockchain-found-a-use-beyond-crypto-trading/news-story/203a968b109c9929eccf8e58f9f54aed

Monday August 15, 2022 - The Inflation Reduction Act (IRA) is not yet law, but will be too soon.  Democrates and Progressives think the IRA is going to solve all of our problems by making the rish pay their fair share and protecting all others from increased taxes.

"By beefing up the IRS's capacity to go after wealthy tax cheats, you're going to be able to collect at least $400 billion of that over the course of the next ten years, and I suspect substantially more," said Treasury Department employee.

The truth is not as appealing as the Treasury would lead us to believe.

Attorney Steven A. Leahy reveals tthe good news according to progressives.

https://www.npr.org/2022/08/14/1117317757/irs-tax-evaders-dodgers-inflation-reduction-act-enforcement

https://www.commondreams.org/news/2022/08/13/biggest-win-tax-fairness-decades-progressives-cheer-reforms-ira-demand-more

Thursday August 11, 2022 - The Inflaction Reduction Act will allow the IRS to hire an army of new auditors.  But, the IRS is already looking to hire 300 Criminal Investigation Special Agents.  The job posting for that position has garnered lots of attention.

In addition to the duties one would expect for an IRS agent, the posting included "legally allowed to carry a firearm," and "major duties" include "Carry a firearm and be willing to use deadly force, if necessary" and "Be willing and able to participate in arrests, execution of search warrants, and other dangerous assignments,"

Attorney Steven A, Leahy exposes the IRS job posting on Today's Tax Talk.

https://www.foxbusiness.com/politics/irs-faces-online-uproar-special-agent-job-posting-requiring-ability-use-deadly-force-necessary

https://www.marketwatch.com/story/yes-the-irs-is-hiring-criminal-investigators-that-can-use-deadly-force-but-heres-some-context-11660247355

https://www.nationalreview.com/news/irs-deletes-job-posting-seeking-applicants-willing-to-use-deadly-force/

Tuesday August 9, 2022 - The IRS is still evolving their handling of Cryptocurrency.  They included, for the first time, a "virtual currency" question on the 2019 1040 Tax Return.  That year, the queston was placed on Schedule 1 "Additional Income and Adjustments to Income." and asked "At any time in 2019 did you receive, sell, send, exchange or otherwise aquire any financial interest in any virtual currency?"

The question did not change for 2020 - but where the question was asked was.  The queston was moved from Scheudle 1, a scheudle not included on every 1040 tax return, to the front page.  Acutally, the first question - right under the taxpayers' name and address.

In 2021, the question changed slightly.  Instead of asking if a taxpayer - "otherwise aquired" an interest in virtual curreny - the question focused on the disposal of virtual currency, as that is the trigger to a taxable even.

In 2022 - the question is proposed "At any time during 2022, did you: (a) receive (as a reward, award, or compensation); or (b) sell, exchange, gift, or otherwise dispose of a digital asset (or a financial interest in a digital asset)?"

This new queston is captures much more than the previous questions.  Note the shift from "virtual curreny" to "digital assets."

Attorney Steven A. Leahy comments on the proposed changes to the crypto queston on 1040 tax forms on Today's Tax Talk.

https://money.com/irs-crypto-question-tax-return/

https://news.bitcoin.com/irs-expands-crypto-question-on-tax-form/

Monday August 8, 2022 - We have been reporting on the massive expansion of the IRS for some time.  Several times, it looked like the expansion was dead, dead, dead.  

But, no. IRS Expansion was ALWAYS going to happen, as long as the Democrates have Congress.  They can't spend more money unless they raise more money.  And they can't say they are raising taxes.  So, they have to invent gimmicks and work arounds.  Like increasing audits to tax the rich.

We all know, the additional 1.2 million audits per year will taget everyone but the wealthy.

Attorney Steven A. Leahy goes through the numbers on Today's Tax Talk.

https://www.americanthinker.com/articles/2022/08/increasing_the_irs_annual_budget_by_seven_times_doesnt_add_up.html

https://www.washingtontimes.com/news/2022/aug/6/the-misnamed-inflation-reduction-act-a-pointless-g/

https://republicans-budget.house.gov/press-release/democrats-inflation-act-empowers-irs-to-audit-and-harass-hardworking-americans/

https://gop-waysandmeans.house.gov/brady-on-manchin-biden-bill-attention-wal-mart-shoppers-more-irs-audits-headed-your-way/

https://www.finance.senate.gov/ranking-members-news/crapo-democrats-are-proposing-more-taxes-more-spending-higher-prices-and-an-army-of-irs-agents

Thursday August 4, 2022 - The Inflation Reduction Act (yeah, right) proposes doubling the size of the IRS to collect more taxes by increasing audits on wealthy tax cheats.  

Today, IRS Commissioner Charles Rettig promised “These [additional] resources are absolutely not about increasing audit scrutiny on small businesses or middle-income Americans. As we have been planning, our investment of these enforcement resources is designed around Treasury’s directive that audit rates will not rise relative to recent years for households making under $400,000.”

So, not to worry America - the IRS isn't coming after you.  Or, are they?

Attorney Steven A. Leahy looks at the IRS promises and helps you decide if you can count on those promises.

https://www.nytimes.com/2022/08/04/business/irs-audits-funding-congress.html

https://nypost.com/2022/08/03/why-irs-80b-expansion-is-a-nightmare-for-small-business/

https://www.washingtonexaminer.com/restoring-america/fairness-justice/as-irs-prepares-to-double-in-size-it-isnt-the-billionaires-who-should-be-worried

Tuesday August 2, 2022 - The infrastructure bill Congress passed in November 2021 contained new “broker rules.” The broker rules require that crypto firms collect customer transaction data and is set to take effect in 2023 with full reporting to occur in 2024 (for calendar year 2023).

These rules are designed to overcome the difficuties taxpayers have found when reporting cryptocurrency trades on their annual tax returns.  

Recently, the IRS announced it is crafting a new information return dubbed 1099-DA (Digital Asset).  This form is speicically designed to report the information needed to calculate gains (or losses) such as the asset type, date purchased, date sold, gross proceeds and cost basis.

Attorney Steven A. Leahy reviews the IRS proposal and how it will effect taxpayers on Today's Tax Talk.

https://www.forbes.com/sites/shehanchandrasekera/2022/08/01/the-irs-is-working-on-a-new-tax-form-to-capture-your-crypto-activity/?sh=48a1bbc6c23c

https://www.lexology.com/library/detail.aspx?g=a33c41f7-d82f-4366-b10e-c946c747d6ac

https://coinledger.io/blog/form-1099-da

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Monday August 1, 2022 - If you are lucky, you may win the Lottery or find treasure.  Or, if you are the IRS, you do both routinely.

That's because, each time someone wins something, anything, the IRS gets their end.  

The recent news of the lucky Illinois resident who hit the $1.3 billion Mega Millions Jackpot is a good case study. The prize is set to be paid out over 30 years - or a lump sum upfront.  Either sceanerio has the IRS and the Illinois Department of Revenue racking in a sizeable bounty.

But the lottery isn't the only boon for the taxing authorities. Found treasure is income.  Treasure, like a historic baseball cought by a fan, could be taxable.

Attorney Steven A. Leahy talks about these tax obliations on Toiday's Tax Talk.

https://www.kiplinger.com/taxes/602142/tax-on-mega-millions-jackpot

https://www.abqjournal.com/2520585/baseball-history-frequent-flyer-miles-and-the-irs.html

https://www.thecentersquare.com/illinois/illinois-quick-hits-lottery-winner-could-pay-386-million-in-taxes-work-comp-fraud-case/article_d86cdac8-11ad-11ed-9cf8-3fc09e1f3f14.html